Got Judgment? It May Not Be Too Late To Add A Judgment Debtor

Suppose that you sue a limited liability company to enforce a note and win your case. You also sue the sole owner of the LLC for fraud, but the court is not persuaded. Now, you have a judgement against the LLC but would really like to add the sole owner of the LLC as a judgment debtor. The alter ego theory might work, but you failed to plead it in the original complaint. Are you out of luck?

Earlier this week, the Second District Court of Appeal in Misik v. D’Arco held that “Code of Civil Procedure section 187 authorizes a trial court to amend a judgment to add a judgment debtor who is found to be an alter ego of a corporate defendant.” The court found that because the alter ego doctrine is premised on the theory that an identity of interest exists between two parties, “amending a judgment to add an alter ego does not add a new defendant but instead inserts the correct name of the real defendant.”

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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